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Context
State of the Canadian Electricity Industry 2022 Accelerate Net Zero
What is ESG?
ESG stands for Environmental, Social and Governance considerations that organizations are expected to annually measure, report and integrate into their decision-making structures.
Context
Driven by the ongoing pandemic and public concerns around environmental and social justice issues, 2021 was another year of tremendous growth for ESG-related activity by governments, investors and companies. The meteoric rise of ESG considerations comes at a critical juncture in human history. The COVID-19 pandemic is still raging in waves; climate-induced severe weather events are wreaking havoc in many parts of the world; social injustices are coming to the forefront of public discourse; and Indigenous reconciliation remains a distant reality, especially in Canada.
There are no silver bullets to solve these mega-trends overnight and the work ahead is no less arduous than it is today. However, the heightened interest in ESG is an indication that the world is finally heeding these considerable challenges and looking for solutions, especially from the private sector. Some governments and industries have been at this task for decades, while others are starting fresh. Whatever the case may be, the time has arrived to accelerate the integration of ESG into organizational decision-making processes and use ESG considerations to drive continuous performance improvement for the betterment of the world.
The electricity industry’s journey on this path started in the late 1990s when Electricity Canada and its members launched the Environmental Commitment and Responsibility (ECR) program to improve performance on a range of issues, including climate change. As part of this initiative, Electricity Canada members also agreed to manage key environmental risks consistent with ISO 14001 Environmental Management System[1] Standard.9
State of the Canadian Electricity Industry 2022 Accelerate Net Zero
Theme 2 An Industry Ahead of the Curve: Looking Beyond the ESG Hype
In 2009, the electricity industry raised the bar further by expanding the ECR program and launching Sustainable Electricity, a holistic sustainability initiative for Electricity Canada member companies to collectively address material ESG issues. This action was further augmented a few years later by the introduction of the Sustainable Electricity Company designation for those committing to the ISO 26000 standard on social responsibility.10 The industry integrated this standard as soon as it was released to the public by ISO, again an example of the industry getting ahead of the curve on the social aspects of ESG.
Sustainable Electricity Program Pillars
Low Carbon Future • Reduction of direct/indirect emissions • Electrification • Energy efficiency and conservation
Infrastructure Renewal and Modernization • Investments in new and existing electricity infrastructure
Building Relationships • Early engagement and consultation with Indigenous communities • Local community engagement, development, and customer support
Risk Management Systems • Environmental stewardship and mitigation of impacts (e.g., spills) • Employee, contractor, and public health and safety • Cyber security and resiliency
Business Excellence • Investments in technology innovation • Regulatory innovation • Employee equity, diversity and inclusion • Talent recruitment and retention Thus, Electricity Canada member companies have been integrating sustainability considerations in their decision-making processes, conducting materiality assessments, establishing baselines, and measuring and reporting their performance for decades. The industry’s collective efforts have paid off. Greenhouse gas emissions are at an all-time low; investments to refurbish and modernize the grid have increased; joint ventures and partnerships with Indigenous communities are developing at a steady pace; strategic and operational risks are being managed effectively using internationally recognized ISO management systems; and business excellence is being driven through investments in new technologies, processes, and agile and nimble employees. Looking ahead to 2022 and beyond, the electricity industry is in an enviable position to address ESG considerations—not only from the perspective of performance tracking and reporting, but also through the lens of integrated company decision-making.
